The price of graphics processing units (GPUs), also known as graphics cards, is undoubtedly still far from the manufacturer’s recommended retail price (MSRP). However, they are not what they used to be either, especially considering how GPU prices looked just a year ago.
For example, the price of a GPU from Nvidia GeForce RTX 30-series is 14% above MSRP, according to reports from 3D Center. While the Radeon RX 6000 from AMD has risen by 7% from the MSRP from April 17 and May 8. On the other hand, it’s the first time since January that AMD’s Radeon RX 6000 fell below 10% over MSRP.
At the same time, just a month ago, these same prices were 19% and 12% above their MSRP, respectively.
Nvidia RTX 3080 now goes in the price range of $ 1,000 to $ 1,300. Despite being such a long way from the $ 699 MSRP, the price has still dropped by almost 30% from its peak at $ 1,800.
Nevertheless, the question is whether the declining price of GPUs is in any way related to the current market conditions for cryptocurrencies.
At present, there is virtually no digital asset, large or small, that has not been hit by the tsunami cryptocurrency market. While cryptocurrencies continue to collapse, GPUs are becoming increasingly affordable. So, one might wonder what is responsible for the steady decline in GPU prices recently.
Aldrin’s founder and CEO, Hisham Khan, believes that the cryptocurrency market has benefited GPUs such as Nvidia. If the current downturn and sales in the market continues, along with the prolonged low activity in the cryptocurrency space, it would “reliably affect GPU manufacturers”. He told the Cointelegraph:
“If you’re working on Bitcoin and other cryptocurrencies with an Nvidia graphics card, then the time you would need to spend on mining after committing capital to buy these GPUs would depend on the price of the cryptocurrency. If prices fall, you would have to work longer to achieve equilibrium, which could reduce the number of people from jumping into mining. “
Factors that cause GPU price increases
GPU prices can go crazy for a variety of reasons, some of which include high demand for new products, global chip shortages, supply chain problems, and increased demand due to the cryptocurrency boom.
First, as with almost all upcoming products, there is a promise of better features or performance than the predecessor that leads to increased demand for the product and an inevitable price increase.
For example, while Nvidia and AMD are planning to release the next generation of graphics cards, some kind of overpricing can be expected. It should also in some way lower the price of cards that are already on the shelves.
According to a report from Digital Trends, some believe that when both Nvidia and AMD launch their new products, other existing GPUs will undoubtedly fall in price or even fall below the MSRP.
Second, when there is a shortage of chips, the production of graphics cards becomes even more cumbersome and there is a struggle to get your hands on the few GPUs that are in circulation. Just as expected, demand increases and prices inevitably rise as well.
Finally, there is a strong link between video cards and the cryptocurrency market, as GPUs can be used to solve the cryptocurrency-intensive process of proof-of-work (PoW) blockchains such as Bitcoin.
According to the Digital Trends report in 2021, about 25% of all graphics cards sold in the first quarter of the year went to cryptographic miners. It accounts for nearly 700,000 GPUs; as is often seen in the past when encryption is booming, GPU prices are mostly up and vice versa.
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Bitcoin’s sadness, players’ luck
Khan believes that whether players are in inflexible symbols (NFTs) or cryptographic, “I would say the brand and so far about what NFTs and the crypto community have done” for the game space has not gotten very well. He said:
“It’s a common attitude if you just look at the best streaming players that play games like NFT and cryptocurrencies are very bad, everything is written off as just a scam. So, there is a need for good actors in the space to create a fun and sustainable game that would benefit from the use of cryptographic and symbolic techniques, not the other way around.
The current decline in GPU prices can be attributed to the current market conditions of cryptocurrency. Cryptocurrencies plummeted, as did the price of video cards, with some smaller miners relying on GPU features leaving the market.
However, some believe that the price of graphics cards has been falling steadily for some time. Indeed, in February 2022, a report from the Tech Times already indicated that price increases would be on all lines at the GPU level.
It should be noted that the collapse of the cryptocurrency market did not happen exactly overnight either, as the market has been in a general downturn since the beginning of the year.
Despite fluctuations and the cryptocurrency market going hand in hand, last week has been one of the wildest in the cryptocurrency space. Ever since they reached a historic high in November 2021, two leading cryptocurrencies, Bitcoin (BTC) and Ether (ETH), have been declining. And when it came to the aforementioned top two, came the bear market or so-called cryptic winter for the entire ecosystem.
According to a Reuters report, however, a recent collapse has led to the cryptocurrency market losing about 800 billion dollars in value within a month. And while the price of GPUs and games lives up to this, miners do not.
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Miners are typically rewarded with 6.25 BTC for completing a block, according to Investopedia. This means that around November last year, when the price of Bitcoin was around $ 55,000, the prize for finishing a hash was around $ 344,000. But today, BTC trades at about $ 30,000 and the prize pool is expected to be around $ 188,000 for completing the hash.
At the same time, rising electricity costs and more mining difficulties are cutting down on the profit margins of cryptocurrency miners, who could drive some to leave the market.
In addition to the current market conditions, there is also the issue of transferring Ethereum to the Evidence (PoS) model. This form of solidarity system will not rely on miners solving cryptographic puzzles to verify transactions but on mortgaged tokens to maintain the health of the network, which completely overcomes the goal of mining, thus opening up a huge supply of GPUs for the average gamer.
Recent research by a popular expert and pioneer in the graphics industry Jon Peddie, who is also the head of Jon Peddie Research (JPR), has argued that cryptocurrencies miners usually buy huge, GPU purchases for their operations. So, now that the price of cryptocurrencies is going down, the graphics card market will be greatly affected.
At the same time, it is very important to understand that the cryptocurrency could eventually recover and when the market improves, there is a chance that the GPU price could rise again, especially considering the relationship between the GPU price and the cryptocurrency market that has been established so far.
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